Offering 401(k) plans is no longer a responsibility only large corporations have to deal with. In a sweeping national initiative (a Congress-approved provision to the Secure Act), there is a mandate in effect that stipulates that even small businesses (in some states, even ones with as few as five employees) must ensure that workers receive 401(k) benefits.
Impact on Small Businesses
Many states (including New York, New Jersey, Connecticut, California, Illinois, Maryland, Massachusetts, Oregon, Vermont, Virginia, and Washington) have already passed legislation that mandates retirement plans for small businesses, while others are following suit.
In New York City, businesses that have been in operation for at least two years must offer workers (even part-time employees working 20+ hours a week) a 401(k) plan, or refer them to a city-managed retirement plan. This is all part of a recently enacted law called the “Retirement Security for All” Act (comprised of Bill Nos. 888-A and 901-A), aiming to offer retirement security.
In the state of New Jersey, employers must either provide workers with a 401(k) or other retirement plan option or register them into the “Secure Choice Savings Program.”
Consequently, employers have to enroll eligible employees in individual retirement savings accounts, allocate their funds into these IRAs, and keep compliance records for a minimum of three years.
This translates to a heaping amount of new clerical work for many businesses. Manually rectifying payroll with a 401(k) or any retirement plan is a painstaking, slow process, where the slightest error can create a ripple effect that leaves businesses susceptible to audits and fines.
Syncing Payroll with 401(k)
The solution to this dilemma has been developed by software companies that automatically integrate payroll with retirement plans. Fingercheck has partnered with Human Interest, an industry-leading 401K(k) provider, which allows for payroll and 401(k) synchronization in a “touch-free” technique that is remarkably straightforward and effortless.
When you process payroll through Fingercheck, the data is seamlessly streamed to Human Interest, whose platform automatically implements the figures. This “touch-free” integrated technique is remarkably simple, efficient, and time-saving.
As the inclusion of 401(k)s is mandated by states across the country for all size businesses, stay ahead of the curve with Fingercheck’s integrated 401(k) solution.
Plus, your business can receive up to $15,000 in SECURE Act tax credits when starting a new 401(k) plan, and you may also be eligible for tech credits up to $4,000 from Human Interest if you sign up before December 31, 2021.
Read more about Fingercheck’s integrated 401(k) solution here and learn how to ensure proper and practical implementation of 401(k) for your business.